How Is Nitaqat Calculated? Formula, Rules and Examples
Nitaqat compares two numbers. Your Saudization percentage is average Saudi workers divided by average Saudi plus non-Saudi workers, times 100. Each band's threshold is Y = M ln(X) + C, where X is workforce size and M and C are constants MHRSD publishes by economic activity, band and year. Your band depends on where your percentage falls against four thresholds, and the assessment covers the whole entity.
How is Nitaqat calculated?
Nitaqat is calculated in two steps: work out your Saudization percentage, then compare it with thresholds that MHRSD sets from a formula. The Developed Nitaqat guide for 2026 defines both steps, and the result is your Nitaqat band.
| Step | What happens | Output |
|---|---|---|
| 1 | Divide average Saudi workers by average total workers, times 100 | Your Saudization percentage (n) |
| 2 | Calculate four thresholds with Y = M ln(X) + C | Y1, Y2, Y3, Y4 |
| 3 | Compare n with the thresholds | Red, Low Green, Medium Green, High Green or Platinum |
How is the Saudization percentage calculated?
The percentage is the sum of average Saudi employees divided by the sum of average Saudi and average non-Saudi employees, multiplied by 100. This is how MHRSD's guide defines the Saudization ratio.
Saudization percentage = Saudi average / (Saudi average + non-Saudi average) x 100
Two points follow from this wording. The guide uses averages, not a single day's headcount. And the ratio is measured across the entity. The averaging period is not stated in the sources we could check, so confirm it against the figure Qiwa shows you.
What is the Y = M ln(X) + C formula?
Y = M ln(X) + C gives the minimum Saudization percentage for a band. MHRSD's guide and Clyde & Co's summary describe it the same way. The target climbs gradually as workforce size grows, in place of the step changes at fixed brackets used before.
| Term | Meaning |
|---|---|
| Y | Minimum Saudization percentage for the band |
| X | Total workforce of the entity |
| log | Natural logarithm, as we read the guide |
| M | Constant for the curve, published for each economic activity and band |
| C | Constant that sets the level, published by band and by year (2026, 2027, 2028) |
MHRSD lists M and C in Appendix 1 of the guide, which covers dozens of economic activities. In the table we could check, C rises by the same step each year, which is how targets tighten across the cycle. We do not print the constants here, because wrong numbers are worse than none. Look up your activity in the official guide or run your figures through the Nitaqat calculator.
How do the thresholds turn into bands?
You get four thresholds, Y1 to Y4. Below Y1 is Red. Y1 up to Y2 is Low Green, Y2 up to Y3 is Medium Green, Y3 up to Y4 is High Green, and Y4 or above is Platinum. Each band has its own M and C, so the four lines are separate curves.
How does Qiwa calculate Saudization rates?
Qiwa shows the outcome of MHRSD's Nitaqat method applied to the records held for your entity: the Saudization percentage, the four thresholds for your economic activity and year, and the band that follows. Only Saudis whose contract is documented on Qiwa and who meet the salary rule count in the numerator. You can test scenarios in the Nitaqat calculator, but the band in your Qiwa account is the official one.
What counts as a Saudi employee?
Salary decides how much each Saudi employee counts. Al Tamimi reports the following weights.
| Monthly salary | Counts as |
|---|---|
| SAR 4,000 or more | 1 Saudi employee |
| SAR 3,000 to 3,999 | Half an employee |
| Below SAR 3,000 | Not counted |
Al Tamimi words the middle band as "more than SAR 3,000 but less than SAR 4,000" and the bottom band as "less than SAR 3,000", so the treatment of exactly SAR 3,000 is unclear. Avoid planning around that boundary. Our salary thresholds page and counting rules cover this in more depth. The guide extract we could read does not spell out how a half-counted Saudi enters the denominator, so treat the examples below as simplified.
Worked example 1: the Saudization percentage
An entity has 100 workers: 30 Saudis, all earning SAR 4,000 or more, and 70 non-Saudis.
30 / (30 + 70) x 100 = 30.0%
Add five Saudi hires and keep everyone else: 35 / 105 = 33.3%. Replace five non-Saudi positions with Saudis: 35 / 100 = 35.0%.
Replacing positions lifts the percentage more than adding headcount, because the denominator does not grow. If you land in a lower band, read what Low Green and Red restrict, and check how Qiwa contracts feed your record.
Worked example 2: why entity level matters
Two branches carry out the same economic activity.
| Branch | Saudis | Total workers | Branch percentage |
|---|---|---|---|
| Branch A | 10 | 20 | 50.0% |
| Branch B | 5 | 80 | 6.3% |
| Entity | 15 | 100 | 15.0% |
Under entity-based assessment the 15.0% figure is what counts. Branch A's strong result lifts the pooled figure and Branch B's weak result pulls it down, so the band follows the 15.0% entity figure, not either branch alone.
Worked example 3: how the log curve behaves
These constants are invented for illustration and are not MHRSD values. Take M = 2 and C = 10, with natural logarithms.
| Workforce (X) | Y = 2 x ln(X) + 10 |
|---|---|
| 50 | 17.8% |
| 100 | 19.2% |
| 200 | 20.6% |
| 1,000 | 23.8% |
Doubling the workforce adds M x ln(2), about 0.69 x M, which is 1.4 points here. The curve rises with size but flattens. With real constants the level differs, and the shape is the same.
Worked example 4: salary and counting
| Saudi employee | Monthly salary | Counted units |
|---|---|---|
| Employee 1 | SAR 6,000 | 1 |
| Employee 2 | SAR 4,000 | 1 |
| Employee 3 | SAR 3,500 | 0.5 |
| Employee 4 | SAR 2,800 | 0 |
Four Saudi employees on payroll give 2.5 counted units. A pay review that lifts Employee 3 to SAR 4,000 adds 0.5 units, and lifting Employee 4 above SAR 3,000 begins to count them. Pay structure can therefore move your band as much as hiring.
What MHRSD says
- Ratio = sum of average Saudi employees / sum of average Saudi and non-Saudi employees x 100.
- Thresholds follow Y = M ln(X) + C, with constants in Appendix 1 for 2026 to 2028.
- Assessment is at entity level across branches in the same economic activity.
Our analysis
- Hand calculation is useful for planning but not for proof. Use Qiwa for the figure that counts.
- Because C steps up yearly, a flat Saudi percentage loses ground across the cycle.
- Replacing roles moves the ratio faster than adding roles. Pay moves it too.
What should I check before relying on my own calculation?
- Your registered economic activity, since M and C depend on it.
- Whether all branches in that activity are included.
- Which year's constants apply to the period you are testing.
- Salary and contract records for each Saudi employee.
- Whether part-time or flexible contracts are treated differently, covered under part-time and flexible work.
- The result in the official tool. See the Nitaqat overview and the rates database for the profession rules that run alongside it.
This page describes the rules and does not give legal advice.
Frequently asked questions
01How is the Saudization percentage calculated?
The Saudization percentage is the average number of Saudi employees divided by the average number of Saudi plus non-Saudi employees, multiplied by 100, as MHRSD's 2026 Nitaqat guide defines it. It is measured across the whole entity. Saudis count by salary: SAR 4,000 or more counts as one, SAR 3,000 to 3,999 as half.
02How does Qiwa calculate Saudization rates?
On Qiwa, your Nitaqat result applies MHRSD's method to the records held for your entity. It divides average Saudi workers by average total workers, then compares that percentage with four thresholds from Y = M ln(X) + C for your economic activity, headcount and year. Only Saudis with a Qiwa-documented contract and qualifying salary count.
03Is the Nitaqat logarithm natural or base 10?
MHRSD's guide describes it as the natural logarithm of workforce size, as we read the Arabic text. That matters if you calculate by hand: use ln(X), not log10(X). For official results, use the Qiwa calculator, which applies the constants for you.
04What are the M and C values?
MHRSD publishes them in an appendix to the 2026 guide, by economic activity and band, with C set for each of 2026, 2027 and 2028. We do not reproduce them here because we could not verify the full table against the official PDF. Check the guide or Qiwa.
05Does a bigger company need a higher Saudi percentage?
Generally yes, but gradually. Because the formula uses a logarithm, the threshold rises as headcount grows, with each extra worker adding less than the one before. It no longer jumps when you cross a fixed size bracket.
06Are Saudi employees counted equally?
No. Al Tamimi reports that a Saudi earning SAR 4,000 or more a month counts as one, SAR 3,000 to 3,999 counts as half, and below SAR 3,000 does not count toward the percentage.
07Is Nitaqat measured on a single day's headcount?
MHRSD's guide defines the ratio using averages of Saudi and non-Saudi workers, not a one-day snapshot. We could not confirm the averaging period from the sources available, so check how Qiwa shows your figure.
08Are branches calculated separately?
No. Under the 2026 program, Saudization is assessed at entity level, across all branches carrying out the same economic activity. Add the branches together before you work out the ratio.
Sources
- MHRSD: Developed Nitaqat Program Procedural Guide, 2026 edition (Arabic). Ministry of Human Resources and Social Development, 2026-01.
- Clyde & Co: Saudi Arabia's Developed Nitaqat Programme, key updates from May 2026. Clyde & Co, 2026-06.
- Al Tamimi & Company: Saudi Arabia's 2026/2027 Saudisation Overview. Al Tamimi & Company, 22 September 2026.
This page explains Saudi workforce localization rules for general information. It is not legal advice. Rules change, so confirm against the official MHRSD decision linked above and take advice from a qualified Saudi legal adviser before acting. StrongYes is an independent publication and is not affiliated with MHRSD, Qiwa or any Saudi government body. Full disclaimer.